From the course: Financial Analysis: Making Business Projections

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Creating a product-level projection

Creating a product-level projection - Microsoft Excel Tutorial

From the course: Financial Analysis: Making Business Projections

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Creating a product-level projection

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Another great tool at your disposal is to have a financial plan or even forecast done at the product level. One of the reasons is that you can use it as a goal for you to reach on each of the product or family of family of product you're selling. Another great reason is that most of the time products have a different gross margin profile which means that some products are more profitable than others. Sometimes even companies sacrifice most or all of their margin on a certain product and use it as a way to attract new customers with the objective of then selling them more profitable products. Since products have a different gross margin profile, that means that any change in performance on a given products will influence the profitability of your company. If you generate as much revenue this year as last year but do it by selling products that are less profitable, you will end up making less money. Let's talk briefly about how to prepare a product level projection since it is done on a…

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